Columbia International Affairs Online: Working Papers

CIAO DATE: 06/2011

Declining Inequality in Latin America: Some Economics, Some Politics

Nancy Birdsall, Nora Lustig, Darryl McLeod

May 2011

Center for Global Development


Latin America is known to have income inequality among the highest in the world. That inequality has been invoked to explain low growth, poor education, macroeconomic volatility, and political instability. But new research shows that inequality in the region is falling. In this paper we summarize recent findings inequality, present and discuss an assessment of how the type of political regime matters and why, and investigate the relationship between changes in inequality and changes in the size of the middle class in the region. We conclude with some questions about whether and how changes in income distribution and in middle-class economic power will affect the politics of distribution in the future.